Background: Efavirenz is commonly prescribed for children with HIV infection, yet little is known about risks of neuropsychiatric side-effects. We aimed to compare competence (social involvement, activities, and school performance) and psychopathology (internalising and externalising problems), cognitive performance (intelligence and working memory), and adherence in Tanzanian children on an efavirenz-based versus a non-efavirenz-based regimen. Methods: In this multicentre, cross-sectional, observational study, we included consecutive children (aged 6-12 years) with HIV infection, on combination antiretroviral therapy (cART) for at least 6 months, and with viral loads of less than 1000 copies per mL from HIV care clinics of three primary health facilities and three referral hospitals in Moshi, Kilimanjaro, Tanzania. Children with acute illnesses, medication switch in the 6 months before the study visit, and any history of brain injury or developmental delay before cART initiation were excluded. All interviews and assessments were done by trained local research nurses under the supervision of a medical doctor. The primary outcomes, competence and psychopathology, were measured with the Child Behavior Checklist. We used ANCOVA to assess differences between groups. This study is registered with ClinicalTrials.gov, number NCT03227653. Findings: Between June 19, 2017, and Dec 14, 2017, 141 children were analysed, of whom 72 (51%) used efavirenz-based cART and 69 (49%) used non-efavirenz-based cART. After controlling for age, sex, and clinical and demographic confounders, we observed lower competence (adjusted mean difference -2·43 [95% CI -4·19 to -0·67], p=0·0071), largely driven by lower school performance scores (adjusted mean difference -0·91 [-1·42 to -0·40], p=0·00055), in the efavirenz group than in the non-efavirenz group. More total (adjusted mean difference 5·96 [95% CI -1·12 to 13·04], p=0·098) and internalising (adjusted mean difference 2·00 [-0·29 to 4·29], p=0·086) behavioural problems were seen in the efavirenz group than in the non-efavirenz group, although these findings were non-significant. No differences were found in externalising problems (adjusted mean difference 0·78 [95% CI -1·55 to 3·11], p=0·51). Interpretation: Our results suggest that treatment with efavirenz in children is associated with a mild increase in neuropsychiatric symptoms, especially in children who receive doses higher than or equal to the WHO recommended doses for efavirenz. Clinical awareness and adequate follow-up of neuropsychiatric symptoms in efavirenz in children remain warranted. Funding: Aidsfonds, Radboud University Medical Center.